As the Union Budget 2024-25 approaches, key players in the real estate sector are voicing their expectations and recommendations, hoping for measures that will address their challenges and support the industry's growth. Developers and industry bodies are advocating for policies that will stimulate demand, such as tax incentives for homebuyers and relaxation of GST rates on under-construction properties. There is also a call for increased allocation towards affordable housing projects, which would not only provide homes for millions but also boost construction activity and employment.
Furthermore, the sector is looking for reforms in land acquisition processes to make it more streamlined and transparent, thus reducing project delays. Real estate experts emphasise the need for enhanced infrastructure development, including better urban planning and smart city initiatives, to create sustainable living environments.
Simplify GST And Stabilise Raw Material Costs
Pavitra Shankar, Managing Director, Brigade Enterprises, ,highlights the real estate sector's significant contribution to economic growth and hopes the Union government will consider their recommendations. Shankar calls for the simplification and rationalisation of GST, pointing out that the current 28 per cent GST on cement is burdensome for essential infrastructure and housing projects. Additionally, Shankar stresses the need for measures to stabilise raw material costs, such as steel and cement, to provide relief to developers and reduce property prices. She also advocates for granting industry status to real estate, which would streamline regulatory processes, enhance investor confidence, and provide easier access to institutional financing. Reintroducing input tax credit is another key demand to facilitate smoother benefits transfer to end customers.
Boosting Affordable Housing And Streamlining Approval Processes
Murali Malayappan, CMD of Shriram Properties, commends the Government of India's efforts towards the 'Housing for All' mission over the past eight years. He emphasises the need for private sector participation in affordable housing through effective incentives and calls for the expedited digitization of land records. Simplifying approval processes with a true single-window clearance system is crucial. From a buyer’s perspective, placing GST in the lowest slab and stabilising home loan interest rates are essential to make housing more accessible. He also urges the reintroduction of input tax credits for mid-market and affordable housing to pass on benefits to customers. Highlighting real estate as a key economic driver, Malayappan notes that advancing 'Atma Nirbhar Bharat' in this sector will yield widespread economic benefits.
Expansion Of Tax Exemptions And Increased Capital Expenditure
BS Nesara, Chairman, Concorde, emphasises the need to expand the income tax exemption slab to Rs 10 lakhs to boost personal consumption. He suggests rationalising capital gains tax between real estate and equity markets to encourage investment diversification and free up capital for new investments. He also advocates for a 30 per cent increase in capital expenditure on infrastructure and social programs to create jobs, improve connectivity, and fuel housing demand in newly developed areas. B.S. calls for a reduction in GST rates, highlighting the potential for increased affordability and higher sales volumes for developers, which could ultimately lead to increased tax revenue for the government.
Streamlined Approvals To Boost Affordable Housing
Nitesh Kumar, MD & CEO, Emami Realty stresses the need for the budget to address affordable housing by offering incentives to developers and homebuyers, including tax breaks for developers focused on affordable projects and subsidies for first-time buyers. He advocates for raising the home loan interest rate rebate under Section 24 of the Income Tax Act from Rs 2 lakh to a minimum of Rs 5 lakh. Kumar also calls for the introduction of a single-window clearance system to streamline project approvals and fast-track land acquisition processes. He emphasises the importance of standardising the definition of affordable housing across government schemes and financial institutions.
Enhanced Social Infrastructure To Boost Real Estate
Rohan Khatau, Director, CCI Projects, suggests increasing the tax deduction limit on home loan interest to Rs 5 lakh to alleviate the financial burden on homebuyers. He also highlights the importance of substantial budget allocations for social infrastructure, such as educational institutions, healthcare facilities, and recreational spaces, to improve the quality of life and drive real estate demand. Khatau calls for simplified FDI norms and tax incentives to attract both domestic and international investments. He also urges the government to introduce policies promoting sustainable development, offering tax rebates and incentives for green building practices.
Favourable Capital Gains Tax, Increased Infrastructure Investment
Vedanshu Kedia, Director, Prescon Group, advocates for rethinking the GST structure for the real estate industry, allowing input tax credit to help developers manage cash flows and rationalise prices for end users. He suggests revising capital gains taxation to make it more favourable for real estate transactions and calls for increased funds towards infrastructure development to enhance property values and attract investments. Kedia highlights the significant role of NRIs in the Indian real estate market and recommends policies that simplify regulations, provide tax benefits, and ensure hassle-free repatriation processes. He also stresses the need for incentives to support millennial homebuyers and senior living solutions.
As the Union Budget 2024-25 approaches, the real estate sector hopes that the government will consider these recommendations to foster a conducive environment for sustainable growth and development, addressing affordability, transparency, and regulatory challenges to boost investor confidence and market activity.
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